The border-free Schengen Area cannot function efficiently without a common visa policy which facilitates the entry of legitimate visitors into the EU, while strengthening internal security. The EU has set up a common visa policy for short stays, i.e. stays up to three months, which is applied through the issuance of so-called 'Schengen visas'. In 2011, the present 26 Schengen States1 issued 12.6 million Schengen visas.

What are the existing rules?

A central element of the common visa policy is theVisa Code, which entered into force on 5 April 2010. It sets out the procedures and conditions for issuing visas for the purpose of short stays and airport transit.

While citizens from some non-EU countries are required to hold a visa when travelling to the Schengen area, others are not. The EU has a common list of countries whose citizens must hold a visa when crossing the external borders and a list of countries whose citizens are exempt from that requirement - see Council Regulation (EC) 539/2001 and its successive amendments.

There are currently 42 countries and entities whose citizens do not need a visa. Following today's Commission decision this list could soon include an additional 16 Caribbean and Pacific Island Nations (IP/12/1179).

Current rules also allow for non-EU citizens to benefit from facilitated procedures for the processing of visa applications, based on visa facilitation agreements. So far, the EU has concluded visa facilitation agreements with nine third countries: Albania, Bosnia and Herzegovina, Former Yugoslav Republic of Macedonia (FYROM), Georgia, Moldova, Montenegro, Serbia, Russian Federation, and Ukraine2. Negotiations on additional agreements have been finalised with Cape Verde and Armenia and are on-going with Azerbaijan.

These agreements generally include provisions benefiting all citizens (processing time of max ten working days, reduced visa fee of €35) and facilitations granted to specific categories of travellers: business people, students, relatives, etc. (fee waiver, simplification of supporting documentation, issuing of long-term multiple-entry visas, etc.). Moreover, holders of diplomatic passports are exempt from the visa requirement.

What is the possible impact of additional flexibility in EU visa rules?

Increasing tourism flows to the EU could have significant impact on the wider EU economy. Some research sheds light on potential benefits.

According to Tourism Economics estimates based on different scenario's, the EU-Schengen area has the potential to gain between 8 and 46 million additional inbound international tourists by 2015 if the flexibility in the current visa rules is fully exploited, which could generate an additional income of between EUR 11-60 billion in international tourism receipts (exports) and create between 100 000 to 500 000 additional jobs directly in the tourism sector. According to these same Tourism Economics estimates, total job creation (including both indirect and induced impact) could reach between 200 000 and 1.1 million by 2015.

Besides economic benefits, additional flexibility in the common visa policy could further facilitate people to people's contact, including for EU citizens to be joined by their visiting non-EU family members.

What could be further improved?

Visa procedures have been substantially improved under the Visa Code, however the optimal implementation of the Code has not yet been achieved across the board.

Possible changes to the visa rules for bona fide travellers could lead to further improvements and additional opportunities. The first report on the implementation of the Visa Code, to be adopted in 2013, will look at options for:

- streamlining and shortening the procedures (reconsidering all steps of the procedure including lodging of the visa application by intermediaries/travel agencies, and prior consultation);

- clarifying the definition of the competent consulate for processing the visa application;

- simplifying the application form;

- simplifying the supporting documents requirements;

- clarifying the rules on the issuing of multiple entry visas;

- in order to enhance consular coverage, improving consular organisation and cooperation, e.g. by redefining the legal framework for Common Application Centres, facilitating the establishment of such centres and their functioning;

- enhancing Local Schengen Cooperation in order to make it more efficient (see the recommendations made in the state of affairs report on Local Schengen Cooperation report adopted today - IP/12/1177).

In addition, waiving of the visa requirement for citizens of third countries is of course the most effective visa facilitation. Such decision is proposed by the Commission on a case by case basis, on the basis of several criteria such as irregular migration, public policy and security, etc. The economic impact has not really been taken into consideration so far, but following todays' Communication, this factor could become more prominent in future assessments.

Furthermore, travel facilitation arrangements based on new technologies will also play their part. The upcoming 'Smart Borders' initiative is one example to ensure smoother travel flows at EU's external borders.

Number of Schengen visas applied for and issued in Schengen States in 2011

The number of applications for Schengen visas ('C visas') increases from year to year. In 2009, 10,216,091 C visas were applied for. In 2010, the number was 11,812,352, an increase of 15.6% from the previous year. In 2011, 13,483,497 C visa applications were recorded, an increase of 14.1% from the previous year. The increase between 2009 and 2011 was 32%.

Between 2009 and 2011 visa applications increased by 80.7% in China, 62.4% in Russia, 57.9% in Belarus and 51.6% in Saudi Arabia. Visa applications lodged in the top-10 countries represented 66.3% of all applications lodged worldwide in 2009. The percentage increased to 71.3% in 2010 and 76.2% in 2011.

The agreements with Albania, Bosnia and Herzegovina, Former Yugoslav Republic of Macedonia (FYROM), Montenegro and Serbia are less relevant today since citizens of these countries now benefit from visa-free entry into the Schengen area when holding a biometric passport.